TaxTMI 
TaxTMI 
2015 (2) TMI 766
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.... and the circumstances of the case, the Tribunal was justified in holding that the issue of notice under Section 148 after the issue of under Section 154 is bad in law ?" 3. The respondent - Assessee had filed a return of income for Assessment Year 2005-06 declaring total income of Rs. 83.34 lakhs. The Assessing Officer during the assessment proceedings inquired of the respondent - Assessee the details of its bad debts and also justification for the same. The respondent - Assessee filed a detailed chart as called for indicating therein interalia that an amount of Rs. 1.35 crores is the outstanding loan with M/s.LA Cream Finance Ltd. The Assessing Officer being satisfied with the justification of the bad debts made by the respondent - Assessee and passed the assessment order on 12.12.2007 assessing the respondent - Assessee to an income of Rs. 1.12 crores. This without disturbing the bad debts claimed. 4. Thereafter, a notice dated 24.11.2009 was issued by the Assessing Officer seeking to rectify the Assessment Order dated 12.12.2007. The rectification was on the basis that an amount of Rs. 1.35 crores written off as bad debts was in fact a capital loss and could not be considered....
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....allowed the respondent - Assessee's appeal on the following grounds:- "(a) At the time of original assessment proceedings a specific query was raised by the Assessing Officer with regard to the claim for bad debts as the same was responded to by the respondent. The Assessing Officer being satisfied concluded the assessment by order dated 12.12.2007. Thus, the reopening notice is based on mere change of opinion and therefore, not valid; (b) No tangible material has been brought on record to indicate necessity for change of opinion; and (c) As notice under Section 154 of the Act for rectification was yet awaiting disposal, the notice for reopening under Section 148 is bad in law." QUESTIONS (A) & (B) 8. The grievance of the Revenue with regard to the impugned order so far as change of opinion is concerned, is that the Assessing Officer had acted upon on audit objection which has been received by him. Thus, there was tangible material available for issuing notice for reopening of the assessment. It is further submitted that merely because the Assessing Officer does not deal with a particular issue in the original assessment proceedings, it would not prohibit the Revenue from ....
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....y of the income alleged to have escaped assessment. On this Mr.Chhotaray submitted that the issue which he seeks to urge is that merely because the Assessing Officer has been careless in bringing to tax a particular amount which is chargeable to tax, the Revenue should not be precluded from issuing notice under Section 148 of the Act. This submission of Mr.Chhotaray overlooks the facts that power to reopen is not a power to review an assessment order. At the time of passing assessment order, it expected of the Assessing Officer that he will apply mind and pass an order. An assessment order is not a mere scrap of paper. To accept the submission of Mr.Chhotaray, would mean to negate the well settled position in law as stated by the Supreme Court in the case "CIT Vs. Kelvinator of India Ltd., [(2002) 256 ITR 1 (Delhi)(FB)] " that the concept of 'change of opinion' brought in so as to have in built test to check abuse of power. In view of the above, we find no substance in the submissions raised by Mr.Chhotaray. 11. The decisions cited by Mr.Chhotaray, learned Counsel on behalf of the Revenue in support of his submissions that oversight in passing assessment order will give As....
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....ng allowances for this limitation placed on the observations in Kalyanji Mavji (1976) 102 ITR 287 (SC) the position as summarised by the High Court in the following words represents, in our view the correct position in law (at p.620 of 102 ITR): "The result of these decisions is that the statute does not require that the information must be extraneous to the record. It is enough if the material on the basis of which the reassessment proceedings are sought to be initiated, came to the notice of the Income tax Officer subsequent to the original assessment. If the income Tax Officer had considered and formed an opinion on the said material in the original assessment itself then he would be powerless to start the proceedings for reassessment. Where, however the Income Tax Officer had not considered the material and subsequently came by the material from the record itself, the such a case would fall within the scope of section 147 (b) of the Act" (emphasis supplied) 13. The decision of Delhi High Court in the case "New Light Trading Co."(supra) does not indicate what reasons were recorded for issuing notice of reopening therein. In the present case the reasons as recorded by the Asse....